Market Tips: Go for Junk Corporate Bonds

CNBC.com

Monday, 1 Jun 2009 | 5:02 AM ETCNBC.com

SHARES

The stock market is enjoying a strong rally despite persistent weakness in the global economy. But investors should be looking to buy corporate credit, one expert told CNBC, even of companies that don’t have an investment-grade rating.

Playing Corporate Credit

“Spreads are still astronomically high by historical standards. I’m quite happy having a very low rated credit portfolio, BBBs and lower,” Richard Cookson from HSBC told CNBC.

“I’m relatively bullish on commodities, if you’d said, 'in the aftermath of the greatest financial crisis the world has ever seen that WTI or Brent would be over 60 bucks a barrel,' you’d have been laughed at. I think there are some severe contrasts on the supply side when it comes to energy,” Cookson added.